[Federal Register: November 18, 2002 (Volume 67, Number 222)]
[Rules and Regulations]
[Page 69653-69655]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18no02-8]
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Part V
Department of Education
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34 CFR Parts 36 and 668
Adjustment of Civil Monetary Penalties for Inflation; Final Rule
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DEPARTMENT OF EDUCATION
34 CFR Parts 36 and 668
Adjustment of Civil Monetary Penalties for Inflation
AGENCY: Department of Education.
ACTION: Final regulations.
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SUMMARY: The Department of Education (Department) issues these final
regulations to adjust the Department's civil monetary penalties (CMPs)
for inflation. These are the first such adjustments made by the
Department, and all of the increases are limited to 10 percent.
DATES: These regulations are effective November 18, 2002.
FOR FURTHER INFORMATION CONTACT: Kenneth C. Depew, Office of the
General Counsel, U.S. Department of Education, 400 Maryland Avenue,
SW., room 6E227, Washington, DC 20202-2241. Telephone: (202) 401-8300.
If you use a telecommunications device for the deaf (TDD), you may
call the Federal Information Relay Service (FIRS) at 1-800-877-8339.
Individuals with disabilities may obtain this document in an
alternative format (e.g., Braille, large print, audiotape, or computer
diskette) on request to the contact person listed under FOR FURTHER
INFORMATION CONTACT.
SUPPLEMENTARY INFORMATION: The Federal Civil Penalties Adjustment Act
of 1990 (Inflation Adjustment Act) (28 U.S.C. 2461 note), as amended by
the Debt Collection Improvement Act of 1996 (DCIA) (31 U.S.C. 3701
note), provides for the regular evaluation of CMPs to ensure that they
continue to maintain their deterrent value. As amended by the DCIA, the
Inflation Adjustment Act requires that each agency issue regulations to
adjust its CMPs beginning in 1996 and at least every 4 years
thereafter. The first adjustment of any CMP is limited to 10 percent of
the amount of the penalty.
A CMP is defined in the statute as any penalty, fine, or other
sanction that is (1) for a specific monetary amount as provided by
Federal law, or has a maximum amount provided for by Federal law; (2)
assessed or enforced by an agency pursuant to Federal law; and (3)
assessed or enforced pursuant to an administrative proceeding or a
civil action in the Federal courts.
The formula for the amount of a CMP inflation adjustment is
prescribed by law and is not subject to the exercise of discretion by
the Secretary of the Department of Education (Secretary). The
adjustment reflects the percentage increase in the Consumer Price Index
for all urban consumers (CPI-U) published by the Department of Labor
from June of the calendar year in which the amount was last set or
adjusted pursuant to law, to June of the calendar year preceding the
adjustment.
The Department did not adjust its CMPs for inflation in 1996 and
since then has not adjusted the CMPs that were in effect in 1996. By
statute the Department's first adjustment of a CMP may not exceed 10
percent of such a penalty, and, therefore, we are adjusting those CMPs
by no more than 10 percent. The Department is precluded from making
subsequent adjustments to these CMPs until 2004, and even then, the
Department may adjust these CMPs only for percentage increases in the
CPI-U after June 2002.\1\
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\1\ It will be 2004 before the Department can determine whether
the percentage of the CPI-U for June of the calendar year preceding
the adjustment exceeds that for June of 2002, which would be the
June of the calendar year in which the CMPs' amount was last set or
adjusted pursuant to law. Until 2004, any adjustment by the
Department would be unable to compare the CPI-U for June of 2002
with that for a subsequent year.
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Two of the Department's CMPs were enacted as part of the Higher
Education Amendments of 1998 (Pub. L. 105-244). These CMPs are 20
U.S.C. 1015(c)(5), which provides for a fine of up to $25,000 for
failure by an institution of higher education (IHE) to provide
information on the cost of higher education to the Commissioner of
Education Statistics, and 20 U.S.C. 1027(f)(3), which provides for a
fine of up to $25,000 for failure by an IHE to provide information to
the State and the public regarding its teacher preparation programs.
Although 4 years have passed since enactment of these penalties, not
enough inflation has occurred to require an adjustment under the
Inflation Adjustment Act.
Two additional points regarding the Department's adjustments are
worth noting. First, the Department is using the following CPI-U
figures: 109.5 for June 1986; 124.1 for June 1989; 163 for June 1998;
and 178 for June 2001. And second, the increases to the Department's
CMPs due to these inflation adjustments apply only to violations that
occur after the effective date of the adjustments.
Waiver of Proposed Rulemaking
Under the Administrative Procedure Act (5 U.S.C. 553), the
Department generally offers interested parties the opportunity to
comment on proposed regulations. However, these regulations merely
implement the statutory mandate to adjust CMPs for inflation. The
regulations reflect administrative computations performed by the
Department as prescribed by the statute and do not establish or affect
substantive policy. Therefore, under 5 U.S.C. 553(b)(B), the Secretary
has determined that public notice and comment are impracticable,
unnecessary, and contrary to the public interest.
Regulatory Flexibility Act Certification
The Secretary certifies that these regulations will not have a
significant economic impact on a substantial number of small entities.
The formula for the amount of the inflation adjustments is prescribed
by statute and is not subject to the exercise of discretion by the
Secretary. These CMPs are infrequently imposed by the Secretary, and
the regulations do not involve any special considerations that might
affect the imposition of CMPs on small entities.
Paperwork Reduction Act of 1995
These regulations do not contain any information collection
requirements.
Assessment of Educational Impact
Based on our own review, we have determined that these final
regulations do not require transmission of information that any other
agency or authority of the United States gathers or makes available.
Electronic Access to This Document
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Note: The official version of this document is the document
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Regulations is available on GPO Access at: http://
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(Catalog of Federal Domestic Assistance Number does not apply)
List of Subjects
34 CFR Part 36
Administrative practice and procedure, Claims, Fraud, Penalties.
[[Page 69655]]
34 CFR Part 668
Administrative practice and procedure, Colleges and universities,
Education, Loan programs-education, Student aid.
Dated: November 12, 2002.
Rod Paige,
Secretary of Education.
For the reasons discussed in the preamble, the Secretary
establishes a new part 36 and amends part 668 in title 34 of the Code
of Federal Regulations as follows:
1. A new part 36 is added to title 34 to read as follows:
PART 36--ADJUSTMENT OF CIVIL MONETARY PENALTIES FOR INFLATION
Sec.
36.1 Purpose.
36.2 Penalty adjustment.
Authority: 28 U.S.C. 2461 note and 31 U.S.C. 3701 note, unless
otherwise noted.
Sec. 36.1 Purpose.
The purpose of this part is to make inflation adjustments to the
civil monetary penalties within the jurisdiction of the Department of
Education. These penalties are subject to review and adjustment as
necessary at least once every 4 years in accordance with the Federal
Civil Penalties Inflation Adjustment Act of 1990, as amended.
(Authority: 28 U.S.C. 2461 note and 31 U.S.C. 3701 note)
Sec. 36.2 Penalty adjustment.
The citations for the adjusted penalty provisions, a brief
description of the penalty, and the adjusted maximum (and minimum, if
applicable) penalty amounts are listed in Table I.
Table I, Section 36.2--Civil Monetary Penalty Inflation Adjustments
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New maximum (and minimum, if
Statute Description applicable) penalty amount
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20 U.S.C. 1082(g)..................... Provides for a civil penalty of up $27,500.
to $25,000 for violations by
lenders and guaranty agencies of
Title IV-B of the Higher Education
Act of 1965, as amended (HEA),
which authorizes the Federal
Family Education Loan Program.
20 U.S.C. 1094(c)(3)(B)............... Provides for a civil penalty of up $27,500.
to $25,000 for an institution of
higher education's violation of
Title IV of the Higher Education
Act of 1965, as amended, which
authorizes various programs of
student financial assistance.
31 U.S.C. 1352(c)(1) and (c)(2)(A).... Provides for a civil penalty of $11,000 to $110,000.
$10,000 to $100,000 for recipients
of Government grants, contracts,
etc. that lobby Congress or the
Executive Branch with respect to
the award of Government grants and
contracts.
31 U.S.C. 3802(a)(1) and (a)(2)....... Provides for a civil penalty of up $5,500.
to $5,000 for false claims and
statements made to the Government.
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(Authority: 28 U.S.C. 2461 note and 31 U.S.C. 3701 note)
PART 668--STUDENT ASSISTANCE GENERAL PROVISIONS
2. The authority citation for part 668 continues to read as
follows:
Authority: 20 U.S.C. 1001, 1002, 1003, 1085, 1091, 1091b, 1092,
1094, 1099c, and 1099c-1, unless otherwise noted.
3. Section 668.84 is amended by removing ``$25,000'' in paragraph
(a)(1) introductory text, and adding, in its place, ``$27,500 \1\'' and
adding footnote 1 following the section to read as follows:
Sec. 668.84 Fine proceedings.
* * * * *
As adjusted in accordance with the Federal Civil Penalties
Inflation Adjustment Act of 1990, as amended (28 U.S.C. 2461 note).
[FR Doc. 02-29219 Filed 11-15-02; 8:45 am]
BILLING CODE 4000-01-P